Saturday, March 28, 2015

The brands of Crowd Sourcing and Crowd Funding are patiently
building market share as they disrupt the financial, equity, and rewards' crowd funding
sectors. As Funding Circle, Crowd Cube, Kickststarter and Indiegogo grow so too their
tipping point grows nearer and nearer. A tipping point that companie’s like
Facebook, Apple, Microsoft, HSBC, Citi Bank, Chase and Wells Fargo cannot
ignore. Facebook because of its scale has the platform just waiting for crowd funding
$ and Apple with its new payment system has the ecosystem. So until the behemoths
realize what’s coming down the track then Funding Circle and Kick Starter and Indiegogo are ok but once the light bulb goes on at Facebook or Apple that’s when
crowd funding will become a global people's bank funding business and peoples projects one $ at a
time! Only the other day Facebook announced a walled garden for certain news outlets trying to grab a piece of Drudge's, the Drudge Report's business model.

"The Old Grey Lady of newspapers is reportedly partnering with a brash newcomer in the publishing game — Facebook.

In a scoop about itself this week, The New York Times reported the paper will give up some of its precious website traffic to the social-media giant, a move that some media observers call a power shift in the digital publishing landscape.

Under the proposed deal, Facebook would host content from prominent news outlets such as The Times, National Geographic and Buzz Feed directly inside the Facebook app."

I still prefer Drudge but Facebook has learnt from Microsoft that you do not remain static and sell the same software in a box year after year (remember that) you move, you change, you acquire before you lose market share.

If everything in our capitalistic culture revolves around purpose for money and payment systems and jobs and projects then it is only logical that the end game is that crowd funding will replace the banks or become the bank! This isn't a run on the banks it is a run away from the banks for micro lending and micro equity funding or as today's buzzword Crowd Funding or what I like to call let's Crowd Source Capital.

The latest entrant? Peer-to-peer lender Funding Circle, which lets members of the public and
some organisations make loans to small
businesses.

The London-based tech start-up is set to raise
£50m in the next two months. The new funding,according to the Sunday Times, will give Funding
Circle a $1bn valuation. However, a spokesperson
from Funding Circle told us that this is all
speculationat the moment. Funding Circle was
founded in 2010 by Samir Desai (CEO),
James Meekings (CMO) and Andrew Mullinger.
The tech start-up boasts high profile investors
including Betfair co-founder Ed Wray and
Carphone Warehouse co-founder
Charles Dunstone.

Here are 5 things you should know about Funding Circle:

1. Funding Circle is the world’s leading
marketplace exclusively focused on small
businesses. More than £550m has been
lent to UK businesses to date.
Over $850m has been lent to 8,000
businesses
globally.

2. Since launching, Funding Circle has raised
$123m in equity capital from investors who
backed Facebook, Twitter, Skype and Betfair.

3. Funding Circle has over 37,000 active
investors registered and over 8,000
businesses have borrowed from
the company.

4. Funding Circle lends £35m to small
businesses every month.

5. The average loan amount is £60,000
and businesses can borrow up to £1m.

Want to support your favorite starving artist? A new
payments website—one born out of frustration—
can help you help them.

"Patreon" Co-founder Jack Conte is half of the
musical group Pomplamoose, who started the site
two years ago. The group had been putting their
musiconline, and getting some payment via a YouTubechannel.

Yet with so much free online content available, many
musicians, writers and other creators are struggling to
get paid for their efforts. Conte wants to alter that
dynamic.

In an interview with CNBC's On The Money, Conte
explains, "I spent three months working on a music
videos, working eighteen-hour days, put it out, got
half-a-million views… and got a check in the mail
for a couple hundred bucks."

Conte added: "I thought, nope, that is not going to
be how this works."

The musician decided to launch his own start-up
with former Stanford roommate Sam Yam. Their
idea was to create a digital fan club, to harness the
power of fans. Thus was Patreon born, as a way for
artists to make money from the songs, art and
content they create.

"Artists get ongoing funding from their fans."
Yam told CNBC.

Guido Mieth | Taxi | Getty Images

Patreon says 250 thousand patrons are donating
small amounts of money to 14 thousand active
creators. According to the website, it is sending
$2 million dollars a month to artists, and the
average payment creators are receiving is
$9 a month.

So why would fans pay for something they're
getting online now for free?

"The idea is patrons are donating out of goodwill,
but in terms of what they get back, its mostly
about intimacy and interaction with artists,"
Yam explained.

Kickstarter is the largest crowdfunding platform.
Since its 2009 launch, Kickstarter has fundedmore than 81,000 projects, with 8.3 million people
pledging more than $1.6 billion in funds.

However, Yam explains instead of Kickstarter's
model of providing funding for particular projects,
Patreon is different. The site offers sustainable,
continued funding for artists, he says.

"It's more about supporting artists in an ongoing
way," Yam says. "The artists don't have to go
through building up a whole new project just
for their funding to create a whole new movie,
or anything else."

Patreon itself has received more than17 million dollars in venture capital funding from
investors including Sam Altman (president of Y
Combinator), Stanford University, Alexis Ohanian
(co-founder of Redditt), David Marcus (former
PayPal President), and Stanford University.

Conte says Patreon is growing because more
content creators are going out to their fans and
telling their story, as he did.

"Guys, I'm making stuff. I know you like it,"
he said. "I know you're watching it or listening
to it or reading it. And I'd like to get paid to
continue." Conte says fans then flock to the
site, and are responding with their financial support.

"It's a natural instinct that humans have," he
said. Music and art lovers spot material that
they love, "is beautiful and is worth our attention
and our focus and we want to support it," Conte
added. "We want more of it."

(Bloomberg) -- Camden Town Brewery could seek the finance it wants to expand from a bank at historically low interest rates. Instead, it’s turning to crowdfunding to raise money and its profile at the same time.

The five-year-old company is seeking as much as 3.5 million pounds ($5.2 million) by inviting its customers and other investors to subscribe as little as 10 pounds -- the price of two pints of Hells lager in its own north London pub -- in return for equity. It plans to build a second brewery and triple its staff to 200, with a target to sell five times as much beer in 2020 as it did last year.

Little more than a buzzword a decade ago, crowdfunding has emerged as a challenger to traditional financing models by using Internet platforms to match those wanting money with the tens of thousands of individuals willing to stump up contributions of varying amounts. For young companies such as Camden Town Brewery, an online campaign not only brings in investment without the need for banks, it increases awareness of their products and services.

“The more we bring in the more security we have. It’s less bank debt,” the brewery’s founder, Jasper Cuppaidge, said in an interview. The campaign brought with it marketing spending the company normally wouldn’t have access to and “made us look a lot bigger than we are,” he said.

Financial Crisis

Equity crowdfunding and peer-to-peer lending, in which investors get their money back with interest, took off amid the financial crisis as startups and small firms had trouble getting loans from banks. For investors, it offered the prospect of returns at a time when banks and building societies paid next-to-nothing for deposits.

Now firms selling everything from salad dressing to pay-as-you-go electric cars are piling in, using matchmaking sites such as Crowdcube and Funding Circle Ltd.

Equity financing of the type used by Camden Town raised 84 million pounds last year, five times more than in 2012, according to a report produced by Cambridge University and London-based research firm Nesta. Alternative finance as a whole, which also includes peer-to-peer lending, accounted for about 1.7 billion pounds.

That represents a small slice of the small business lending market. Outstanding loans to private non-financial small and medium-sized enterprises totaled 155 billion pounds in January, Bank of England data show. And crowdfunding is more established in the U.S., though investment regulations there mean the market has been limited to high net-worth investors.

Growth Prospects

With bigger companies joining in, few restrictions on who can invest and the possibility that the Bank of England will increase interest rates from record lows this year, crowdfunding in the U.K. could grow fast, experts say. The average cost of new sterling loans to private non-financial firms fell to 2.5 percent in January, according to the BOE.

“Much in the same way as Amazon challenged Barnes & Noble, so will the financial industry find itself reshaped by online platforms,” said Gary Dushnitsky, an associate professor at the London Business School. “A more interesting question is whether the prevailing platforms will be led by new entrants or set up by existing banks. Cooperation rather than competition may be the hallmark of the future.”

For their money, Camden Town investors get freebies too. Subscribers who put in more than 1,000 pounds are invited to twice-yearly parties with free beer and receive a yearly case of lager. It’s a model used by Mexican food chain Chilango, which last year offered “burrito bonds” giving investors complimentary burritos in addition to fixed-rate payments.

Equity for Punks

For firms, crowdfunding doubles up as advertising and makes future networking easier, said Stian Westlake, research director at Nesta. A Scottish beer maker, BrewDog, started the trend in 2013 by raising 4.25 million pounds in an “Equity for Punks” campaign that included parking a tank outside the Bank of England.

It took less than a month for Camden Town to hit its initial 1.5 million-pound target. Since then, it’s continued to accept money, with almost 1,900 investors pitching in nearly 2 million pounds for 2.6 percent of equity, valuing the business at 75 million pounds. The company will have 3 million pounds of long-term debt this year, according to its accounts.

Over half of those investing through equity-based crowdfunding have an annual income of over 50,000 pounds and 21 percent of investors earn more than 100,000 pounds, according to the Cambridge University/Nesta report.

Ad Campaign

The brewery has taken out advertisements paid for by Crowdcube on the London’s underground rail network to entice commuters to invest some of their salary.

The ads compete for attention with those from retail stockbroker Share Plc, which says it has 260,000 customer accounts. “Gentlemen prefer bonds,” its ads say, in a pun on the 1953 Marilyn Monroe movie.

But with the BOE benchmark in its seventh year at 0.5 percent and yields on government and corporate bonds alike around all-time lows, the chance to invest in eye-catching projects may continue to draw people such as Jamie Smith.

Smith, a 34-year-old designer from London, invested 100 pounds in Camden Town “purely as a gesture of loyalty, being local fans of the brewery” since it began in 2010. “We have no expectations of this being an investment that will offer any real return, but I think our 100 pounds is pretty safe.”

Darren Westlake was named
in the list published in The Sunday Times. The Debrett’s 500 2015 List
recognises the most influential and inspiring people living and working in
Britain.

Other influential people
in the list include: Sir Tim Berners Lee, inventor of the World Wide Web;
Nicola Mendelsohn, head of EMEA operations at Facebook; Sir James Dyson,
inventor of the dual cyclone bagless vacuum cleaner and the retired footballer
David Beckham.

Since Westlake and
co-founder Luke Lang launched Crowdcube in 2011, the platform has raised just
under £55 million for 188 businesses across the UK, equivalent to raising £1569
every second over the last four years.

Speaking about the
accolade, Westlake said: “This is a real honour. We are proud to have
challenged the traditional finance sector and created a vibrant new market for
entrepreneurs seeking finance and investors.”

“Britain has led the world
in financial services for centuries and it is now the turn of ambitious young
and innovative businesses, like Crowdcube, to continue this tradition.”

Crowd Source Capital/ Crowd Funding - The Definition

Crowdfunding (sometimes called crowdfinancing or crowdsourced capital) is an approach to raising the capital required for a new project or enterprise by appealing to large numbers of ordinary people for small donations. While such an approach has long precedents in the sphere of charity, it is receiving renewed attention from entrepreneurs such as independent film makers, now that social media and online communities make it possible to reach out to a group of potentially interested supporters at very low cost. Crowdfunding is also being experimented with as a funding mechanism for journalism and music.

Crowdsurfing

A recent discovery by us of another movement existing alongside Crowdsourcing- "Crowdsurfing" - in the same space. Who knew?

Wikipedia: Crowdsurfing describes the process in which a person is passed overhead from person to person during a concert, transferring the person from one part of the venue to another. The "crowd surfer" is passed above everyone's heads, with everyone's hands supporting the person's weight. At most concerts and festivals the crowd surfer will be passed towards a barrier in front of the stage by the crowd, where they will be pulled off and put onto their feet by the security stewards. Then, they will be sent back to the side or rear of the crowd at the end of the barrier or they may be ejected from the venue (depending on the policy enforced).

Business definition: We would therefore like to welcome you to the world of the crowd surfer: a world in which a new generation of business and political leaders have learned how to harness the energy, ideas and enthusiasm of today’s empowered consumers. They are not manipulators, demagogues or mere populists. They have been smart enough to recognise that people around the globe – emboldened and enthused by a new spirit of enquiry and self-expression, and powered by the internet – have changed the rules of the game. They realise that surrendering absolute control – giving their customers, partners and employees a greater say in the way that their businesses operate – is paradoxically, the most effective way to manage their corporate or political destiny.

In Crowd Surfing, they examine what it takes to become a crowd surfer.

Subject: [Crowd Source Capital] New comment on How Matt Mickiewicz started 99designs.com and made....

תוכנית עסקית has left a new comment on your post "How Matt Mickiewicz started 99designs.com and made...":

I used 99designs and it is really awesome. The Learnable marketplace also sounds very compelling. I guess he finds himself good in creating marketplaces, although from my experience in creating hundreds of business plans to start-ups - creating a marketplace is x10 harder than a service/content website/application bcs you need to convince both customers and suppliers to use it, while one will not come as long as the other doesn't... so if he manages to create marketplaces - he really has a unique ability in hand. Way to go!!!

very nice post on this blog i like it. Now –a-days, every business advertises promote its products and services by creating a company’s website. There are many website designing company in Delhi which provides web design services, web development, web design and development and many more. After creating your website the first way you can make the internet work for you is thorough SEO work.SEO is vital to your success with internet marketing.

Yes, it's a clone. But everything will get cloned and honed, that's the law of the internet. Indiegogo is better because it has 4 different ways of payment, including Paypal, and projects can be made internationally, unlike on Kickstarter. So I, who live in finland, could start a project on Indiegogo, but not Kickstarter. Indiegogo is totally needed and has differing market segment.

Then again, Indiegogo has clunky website, you have to look the status of the projects one by one, while on Kickstarter you can see them on the small reviews. Also, the website is a bit too similar.

They also differ, as you noted, on the payment system. Indiegogo made it so that project always gets any money donated. That isn't really a problem, because the project manager can just promise that even if the amount is not met, he'd work towards the goal with the money he got. He could do it partially, and ask more again there for finishing or he could sell ads on the beginning for the rest of the money. I am thinking of getting money for a high-tech product using Indiegogo, the incentive would be to release all software as Free Software, and such stuff...

Saw your post on Crowdsourcing resources and figured I'd point you towards our product, UserVoice. We allow you to crowdsource customer feedback through an idea submission and voting system. We are different from the competition (in many ways, but primarily) in that we limit the customer's votes to 10, with 3 max spent on each idea. This forces people to really consider their choices and use the currency of votes wisely...bringing the best content to the top. As customers only get votes back when an idea is completed, it also encourages the company using UserVoice to be consistently listening, responding to, and acting on customer ideas.

Give it a look if you get a chance - I'd be happy to provide more info if you're interested.

Hi - I just stumbled across your blog and like what you are doing. I have a deep interest in crowdsourcing and crowdfunding... I am starting a crowdsourced business consulting firm as we speak. We should catch up at some point and share ideas.

I'm a big fan of this blog so don't mean to be critical, but one thing in this post caught my attention.

Because of how MTurk lists the totals, the fact that the number of tasks went from ~192k to 177k doesn't necessarily mean that 15k tasks were done in that short time period. I think that if you post that someone can do your single task and allow it to be done 1000 times, the count goes up by 1000. You could then click cancel and it will go down. So a lot of the churn you see can be driven by that.

Panos Ipeirotis of NYU has the following info on MTurk activity:http://hyperion.stern.nyu.edu/mturk/... as well as top requesters.http://hyperion.stern.nyu.edu/mturk/requesters.php

Other than that small point, I think this post is dead on and that businesses certainly have a use for MTurk. Unfortunately, MTurk's interface is still kind of clunky and businesses have to go through intermediaries like CrowdFlower or Smartsheets to get stuff done. It's hard to just crowdsource a single one-off task.

I came across your site by chance today....you are doing a lot of great stuff....anyways you might want to check out the vpanel of feb 26th at www.shiftworldwide.com and the presentation I gave on March 10th at IIMA in Vancouver (www.iimaonline.org).

Rick

Rick Goossen, CEO

T:604-685-7784

C:604-785-6334

Skype:rickgoossen

"Good for Business"

Anonymous said...

ArtistShare has been doing it successfully for years. They seem to have a more realized version and the product seems to be more mature and realized. I agree, just selling a CD isn't cutting it anymore.

There is another concept that works well at the moment and that applies to any type of art (including music, movies, books, painters, etc). Basically, artists set up a fundraising goal as well as a deadline to raise the money. If they reach the fundraising goal by the deadline, the money is transfered to them, otherwise it is given back to investors. What's more, crowdfunders are not actual investors, since what they get back in exchange is rewards based on how much they gave, like for instance if they give 5€ to a book project they'll get a digital copy of it, and if they give 20€ they'll get the actual signed copy.I found a website following that model called FansNextdoor.com.Any thoughts on this model?

Thanks for the post. You’re right, we’re really trying to shift focus from technology with Dot and encourage people to think about how their mobile can make life better and more fun. We’ve got some great suggestions so far and it’ll be interesting to see what else people want to see.

Hi guys, thanks for covering this! I just wanted to let you know that there's an updated version of this interview on Brand-e (the original version included some copy that wasn't exactly what I said ;-) amended version here http://brand-e.biz/outsourcing-to-the-masses_3903.html it would be great if you could update the article here as well... thanks a lot, cheers, Fran

And made me think you might like to know about this ...Ponoko - the world's easiest making system- An online marketplace for everyone to make stuff, locally.- Designs are instantly priced online, then made and delivered on demand.- For creators, digital manufacturers, materials suppliers and consumers.- Over 30,000 user generated products made to date.- Launched in 2007 at TechCrunch40 in San Francisco and reported in The New York Times, The Wall Street Journal, Financial Times, The Economist, BBC News, The Globe and Mail, WIRED Magazine, The International Design Magazine, MIT Technology Review, Boing Boing, Engadget, Core77, etc, etc.- You can find out more here: http://www.ponoko.com/about/the-big-ideaI'm looking forward to reading your next edition! :)

Best wishes,

Olga

Olga SasplugasMarketing

Anonymous said...

And it's happening for filmmakers on IndieGoGo. Exciting stuff. (www.indiegogo.com)

Hi James,Thanks for the Crowd Source Capital coverage. You can check out our Facebook Application here if you're curious. Through this app, fans don't have to leave Facebook to take action (contribute, share, etc.) We were one of Facebook's "Facebook Connect" launch partners; so all activity you and your fans take on both IndieGoGo hits the newsfeeds and walls on Facebook. Cool stuff.

CheersDanaewww.indiegogo.com

Anonymous said...

Never mind the potential liability Prosper.com is facing after having sold almost $180 million in unregistered securities...

Cambrian House is still alive, we have a crowdsourcing technology platform built on years of experience and we're currently pleased about how everything is going. You can check it out at www.cambrianhouse.com and our platform at www.chaordix.com

Don't believe everything you read on the internet, that's just silly ;)Blue

I recently came across your blog and have been reading along. I thought I would leave my first comment. I don't know what to say except that I have enjoyed reading. Nice blog. I will keep visiting this blog very often.Betty